Andrew Hider: So your question is more around where are we in this GLP-1 progression or what would you like to understand from a context around that space that market?
Michael Doumet: Yes. So sorry for the confusion there on the organic growth. But the question in terms of where you are on the ramp and overall GLP, the ability to move the needle overall for life sciences?
Andrew Hider: And there are multiple reports out there, and I cited a little bit earlier on in the discussion around whether it’s Morgan Stanley or whether it’s JPMorgan. The net result is this is a significant growth area for this solution set. And whether it’s going from $18.8 billion in 2023 to $100 billion in 2030 or a different magnitude, the growth profile is real. And it’s really tied to U.S. obesity and the market there is also in a significant growth profile. So net-net, it’s an opportunity, a significant opportunity for ATS to drive high impact. And as we look at where it is in its journey, we view it still early in its journey and while it’s made progress and to give you some context around progress. Last year approvals, it was the second highest approval year in the last 10 years of de novo drugs, basically new molecules.
And so we’re seeing continued approval in areas to support growth. We’re seeing that auto-injector is an area that offers high value for end customers or end patients. And ATS has a strong play in the ability to support. That said, it’s only one piece of our life sciences offering, and we have multiple offerings that we like. And as a reminder, last quarter, our contact lenses was one of the largest orders within the space. So while we like this area, we’re also involved in radiopharmaceuticals, which is identification of treatment of cancer, we’re involved in wearables, in the treatment of diabetes, we’re involved in many areas that offer high value for customers and very strategic for customers and product launches.
Michael Doumet: Super helpful. Thank you, Andrew.
Operator: Your next question comes from Patrick Baumann with JPMorgan. Please go ahead.
Patrick Baumann: Hi. Good morning. Thanks for queuing me in. Just wondering if you can give an update on the funnel for orders across EVs and food and beverage. I think you just talked about life sciences, but really specifically about calendar year 2024 not so much for fiscal year. I’m curious how to think about orders over the next year. And then more near-term, you do have – you had a really tough comp in the third quarter here, so obviously orders being down shouldn’t be a surprise to people. But the fourth quarter looks like the comp is a little bit easier. Do you have a line of sight to some growth there? Or should we expect book-to-bill to remain below one kind of in the short-term?
Andrew Hider: Multiple questions on that and we’ll see if I can answer all of them. But I’ll go in the order.
Patrick Baumann: Sorry. Okay.
Andrew Hider: I’ll walk EV first to kind of get line of sight and then I’ll go into regulated food and then we can talk a bit more around other areas. But look, and I said this in my prepared remarks, our funnel in the mid to long-term remain strong. And we’re staying very close with customers, while our – certainly near-term will be impacted by current market dynamics. The customers are faced with many areas. So whether it’s technology and technology development or cost structure that they’re looking to offset or even just matching capacity to consumer demand. We’re staying close. And when we look at areas that ATS has differentiated ourselves, we have put ourselves in a position that when our customers come out and they get back to a more measured pace, we’re in a position to offer high value.
And you think of the solutions like the digital twin that we’ve launched, really enable us to maximize their impact to launch their product. And the discussions we’ve had with our customers is they’re focused on EV being a key piece of their investment for CapEx and ATS offers high value for this space. One more area just as a reference, while we certainly still have a large customer, we are working with roughly 10 customers in this space right now. And so varying degrees of where they are in their journey for EV launch, it continues to be an opportunity and strategic for the value we can create for our customer base. Moving on to regulated food. Look, this was a strong quarter. We are pleased with the performance of the business. And yes, last year was a big comp to kind of reference against or comp against.
It had a large order of roughly call it $20 million last year in Q3. The team continues to execute and we are aligned around technology, innovation and really bringing our customers solutions to market. An example of just the way that we think about and utilize innovation, our business worked with AI and utilizing AI with vision and with our Raytec business. And we’re providing the capability to really do an assessment to understand tomatoes when they’re peeled to look for areas that maybe have been missed and then kick out. So it offers higher yield, higher ability and energy continues to be a discussion point. So pleased with the progress on that group, pleased with the performance and one that we view we can continue to really offer high value for our customers.
Patrick Baumann: And then the – I guess the fourth quarter, should we expect some growth there or should book – you think book-to-bill can kind of be around 1 in the fourth quarter?
Ryan McLeod: Yes. Patrick, so this is Ryan. We don’t typically provide forward-looking on our bookings. And with some of these large programs, there’s variability and if something comes in, the last two weeks of March or the first two weeks of April, that can drive some different discussion. And that’s why when we’re looking at bookings, we’re looking at trailing 12-month and over a longer period to understand directionally where businesses is trending and our funnel, our backlog rather typically goes out about three quarters. So in EV, it’s a little bit longer given the duration of those programs. And then we have some shorter cycle businesses that have been added in. But that is really how we look at the business from a quarter-to-quarter perspective.
Patrick Baumann: Understood.
Andrew Hider: And just to add on a little bit to there. We’ve been very focused on strategic end markets and being well positioned in those areas. And so you think of areas like, and we talked a bit about life sciences around and our focus on key niche issues that offer high value, our addition with Avidity and the value that that brings. And by the way, think about it from a standpoint of now we’re in the lab, so you can almost follow the molecule. We’re in the lab all the way to production to energy and the ability and resurgence of nuclear being a green energy supporting really the energy challenges on a global scale. So while we don’t provide that, we have been very strategic in the markets we support and have been very focused, so not immune to end market. Our target’s always been out to execute and really drive performance in the business through our ABM and our playbook.
Patrick Baumann: Okay, great. Makes a ton of sense. Thanks for bearing with me with that short-term question. I’m kind of new to the call, so will keep that in mind going forward. Thanks so much. Best of luck.
Andrew Hider: Great. Thanks, Patrick.
Operator: Your next question comes from Michael Glen with Raymond James. Please go ahead.
Michael Glen: Hey. Good morning. So over the past two days, we’ve seen some pretty strong indications from two of the largest players in the obesity drug market regarding these capacity constraints they’re facing. So can you help us draw the connection between what they are referencing specifically and how this plays into your auto-injector product offering? Like, can – you often referenced these order funnels, can you say whether the order funnel has grown in that market sequentially from last quarter to this quarter? Can you give some indication, like when should we think about timing of these orders coming into play?
Andrew Hider: Yes. So Michael, just to kind of give you some real walk down approach here. As I mentioned in my prepared remarks, the life sciences funnel is strong and our backlog is very strong. The growth of our funnel continues to build and I would say as has grown and our opportunities. We view the big moves really is generally favorable and it’s an area that we can offer high value. And when – and oftentimes, and I talk about strategic end markets and strategic products for our customers. When our customers are launching a solution and their demand is significant, they’re looking to folks like ATS to really help them provide that value to the market. And I walked through our Symphoni technology and really the impact that this has.
But also what it allows us to do is to take a more standard approach to a customized solution. And let me pull a little more meat on the bones there. This allows us to really take this standard product set, this standard capability and bring it to multiple customers. And as customers ramp, they want to go with the provider that offers them the highest capability and highest ability to launch their solution on time, on quality, on budget, and oh, by the way, to be able to continue to increase as their demand increases. So while I mentioned earlier in the discussion and call this is earlier in its journey. We do view we are well positioned to really maximize our impact and maximize our customer’s ability to meet the market demands.
Michael Glen: Okay. And then if we think about last quarter, the indication you provided was something in the ballpark of a $100 million of orders for auto-injectors in this quarter, it was down, it was low single-digit. If we think about that number in the context of what you’re talking about market size, the $18 billion going to a $100 billion. What’s your piece of the pie in those numbers? Are you able to give some type of assessment on that? What’s the size of the piece you are going for in that market?
Andrew Hider: So Michael, I’ll start. Just on orders, the numbers you referenced are directionally accurate. Keep in mind, with orders they are lumpy regardless of market. They are going to – the size of them, the timing. Those aren’t going to be a steady straight line up into the right. It’s going to be more lumpy or call it variable. And we’re talking dollar versus percent. But as you look at the ramp and it’s not always a one for one as far as an increases in percent of the business. But the general growth profile will follow the profile of the investment. And so not my information to be very clear. And I did mention that that was a JPMorgan/Morgan Stanley estimate on the market. Regardless whether you read it from those banks or others, the market growth profile is very strong and ATS is well positioned to support that space.
